Cost of maintenance, aviation fuel to surge on ageing aircrafts
By Predominance of ageing aircraft by domestic airlines operating in Nigeria has led to high cost of aircraft maintenance and aviation fuel (JET A1) consumption.
Experts in the aviation sector say aside the absence of aircraft maintenance facility in the country and high exchange rate, ageing aircraft is a contributory factor to high cost of aircraft maintenance.
Currently, Medview is facing difficulties in carrying out its scheduled operations over insufficient aircraft. Most of its aircraft are out of the country on maintenance, while First Nation’s operation has been suspended as a result of insufficient aircraft.
“There is empirical evidence that suggests that there is up to 30% difference in maintenance cost between new and old aircraft. Newer aircraft are more fuel-efficient than older ones. The older an aircraft gets, the more intensive maintenance is required and therefore the more expensive it becomes to keep them serviced and airworthy,” Obi Mbanuzuo, accountable manager of Dana Air, told BusinessDay.
Mbanuzuo explained that domestic airlines use older airplanes because of financing, and “due to the inability of banks and lending houses to provide long-term loans which are required to acquire newer aircraft, airlines go for cheaper used versions which they can finance themselves without the help of banks.
“For example, a brand new B737-800 costs up to $90 million and Western airlines pay this over 10 to 15 years with the help of leasing and finance houses. Conversely, a used B737-300 costs about $4 million.”
Dung Pam, Nigeria Aviation Safety Initiative (NASI) coordinator, told BusinessDay that since fuel costs present approximately 15 to 25% of operating cost, “fuel efficiency comes high on the list of improvements to be expected from each new model of engines and aeroplanes.” Therefore, new types of aircraft come fitted with winglets, composite materials and more fuel efficient engines, and are definitely much more fuel efficient than older versions.
“The initial acquisition cost of acquisition for these old aircraft is cheaper. However, they are extremely expensive to run and maintain appropriately. In the long term, this proved to be a very bad economic decision as the airlines can barely carry out up to three C check cycles (four and half years) before the aircraft is abandoned due to the prohibitive cost of maintenance.
“This explains why most of our airlines have a short life expectancy of about five years,” Pam said.
A few years ago, the government imposed a 22-year-old ban on any aircraft that must be brought into the country. The move, according to NCAA, was to ensure that Nigeria does not become a dumping ground for old aircraft.
BusinessDay’s checks show that apart from Arik Air, with the youngest airplanes of an average age of less than eight years, other airlines parade aircraft between the ages of 12 to 18 years.
According to Boeing, a major aircraft manufacturer, many factors drive the demand for replacement of old aircraft. Age, according to the corporation, is one, but other factors include relative airplane economics, maintenance requirements and overall market environment. It said in recent years, high fuel costs have played a larger role in influencing decisions to remove airplanes from service.
Roy Ukpebo Ilegbodu, CEO, Arik Air said that during C-checks, airplanes are basically stripped and almost rebuilt. It cost money; the technicians are paid with foreign exchange. Anywhere from $500,000 to $1 million is what airlines need for a C-check.
“When the airplane is going for a C-check, depending on the age of that aircraft, there are some things that the manufacturers will look at. For instance an airplane that has flown for 1000 hours, there are things they expect. So, based on that, the checks will be done.
“As airlines carry out the checks, you may find out more than what the manufacturers will have recommended. You find things like corrosion for airplanes that have operated in our region because of the moisture. When you find corrosion in an airplane, the cost of repair sometimes will double. But the good thing is that Arik’s airplanes are very new, so you hardly will find corrosion in airplanes that are less than 10years old,” Ilegbodu added.
However, Igwe Francis, the Public Relations Officer, National Association of Aircraft Pilots and Engineers said that what matters is that aircraft are maintained to a minimum approval standard, and not necessarily the age of the aircraft.
A few years ago, the government imposed a 22-year-old ban on any aircraft that must be brought into the country. The move, according to Nigeria Civil Aviation Authority (NCAA) was to ensure that Nigeria does not become a dumping ground for old aircraft.
“The NCAA has always assisted operators to acquire new fleet. This was put in place through the Cape Town Convention, which Nigeria signed many years ago. This was what Arik benefited from. Under the programme, the NCAA serves as guarantor to the operator. I can assure you that the 22-year age limit on aircraft brought into the country still stands,” a source in NCAA said.
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